The yen sank to its lowest level against the dollar since June 1990 on Monday, with markets on high alert for possible intervention by Japanese authorities to support the yen.
The Japanese currency’s retreat comes as a raft of strong inflation data boosted the dollar to a five-month high and reignited expectations that the Federal Reserve will not rush to cut interest rates later this year.
The yen’s slide against the dollar has also reignited calls for intervention in the foreign exchange market by Japanese monetary and financial authorities. Japanese Finance Minister Shunichi Suzuki and other monetary policymakers have said they are watching the moves closely and will respond if necessary.
The issue of the strengthening of the dollar was discussed at the spring meetings of the IMF and the World Bank in Washington, and the US together with Japan and South Korea issued a joint communiqué on the specific issue.
Speaking at the G7 in Washington, Japan’s central bank governor Kazuo Ueda said the central bank may raise interest rates again if the yen’s decline pushes inflation sharply higher, underscoring the headache that weaker currencies are causing for policy makers.
The dollar was intraday at 154.82 yen, the highest level since June 1990.
moneyreview.gr with information from Reuters
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